Tuesday, February 05, 2013


The maddening thing is that The Great Recession was (is) a mostly squandered tremendous opportunity. It is, actually, the "free lunch" moment in the economy. Treasury can borrow for nothing and spend it on useful things. The Fed could vastly improve human welfare by mailing everybody $10,000 checks (conceptually, if not legally).

All that works fine until it works, meaning you can do that stuff until you succeed in getting the economy going again. Inflation concerns, while greatly overblown, are real, and eventually you'll only be affecting the nominal economy, but for a time... free money and nice things for everybody!!!

Or not.